Electronic transactions have become an everyday part of the economy via the financial services industry. Whether the use occurs in person or remotely (e.g., via the Internet or Mobile), utilization of various electronic payment instruments by both consumers and businesses is huge and rapidly growing. Thus, more and more merchants are seeing these types of transactions becoming a larger piece of how they receive payments for the goods and services they provide.
Examples of electronic payment instruments may include, but are not limited to, credit cards, debit cards, prepaid cards, alternative payment products, and the like. For the purpose of this disclosure, credit cards, debit cards, and prepaid cards are considered traditional payment products, which are supported by and processed via traditional payment networks. Examples of traditional payment networks may include, but are not limited to, VISA®, MasterCard®, American Express®, and Discover®. By contrast, alternative payment products are considered non-traditional payment products, which today are processed outside of the traditional payment networks. Examples of alternative payment products may include, but are not limited to, PayPal®, BillMeLater®, eLayaway®, and Amazonpayments™.
Systems that are designed to handle transactions of traditional payment products on traditional payment networks are not suited today to process transactions of non-traditional payment products, such as those of alternative payment products. Therefore, the providers of alternative payment products must typically establish direct relationships with merchants or merchant processors in order to facilitate their use (e.g., the relationship of PayPal® with an individual merchant for acceptance). With any payment product, a key factor in its success is its acceptance with as many merchants as possible. Unfortunately, because alternative payment products currently cannot be processed on traditional payment networks and thus need to establish direct relationships with merchants, there exists a significant barrier to their acceptance. The biggest barrier for non-traditional payment product acceptance is the technical development work and resources required from the merchants in order to start accepting non-traditional payment products. Therefore, what is needed are new approaches that overcome the barriers to acceptance of alternative payment products. In particular, what is needed is a way to process non-traditional transactions of alternative payment products on traditional payment networks, without requiring extensive system development efforts for merchant implementation.
Further, traditional payment products may have different pricing structures compared with those of the alternative payment products. Again, today the systems of traditional payment networks are designed to handle the pricing structure of traditional payment products and are not suited to handle the pricing structure of alternative payment products. This is yet another barrier to wide acceptance of alternative payment products. Therefore, new approaches are needed that allow the pricing structure of alternative payment products to be implemented and processed on traditional payment networks.